EXHIBIT 10.17
EMPLOYMENT AGREEMENT
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This Employment Agreement ("Agreement") is made as of the 1st
day of October 2001 by and between Intercallnet, Inc., a Florida corporation
(the "Company") and Xxxxxxxxx X. Xxxxx ("Employee"), with reference to the
following facts and circumstances:
WHEREAS, the Company had previously offered to employ Employee
as a full time employee of the Company, whereupon Employee joined the Company as
an employee thereof as of June 11, 2001; and
WHEREAS, the Company and Employee now wish to continue the
employment of Employee with the Company and for this purpose desire to set forth
the terms and conditions of such continued employment;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter contained, the parties hereto agree as follows:
1. Employment
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The Company hereby employs Employee and Employee hereby
accepts employment with the Company for an initial period of three (3) years
commencing from October 1, 2001 and ending on September 30, 2004 and for
additional periods of one (1) year each commencing at the end of the initial
period and each additional period; provided, however, that the Company or
Employee may terminate such employment, without cause and each at its sole
discretion, at the end of the initial period or at the end of any additional
period by giving notice to such effect to the other party at least six (6)
months prior to the end of the applicable period. As used herein, the phrase
"Employment Period" refers to and shall mean the actual period of employment of
Employee by the Company and/or its subsidiaries hereunder, whether for the
periods provided above, or terminated earlier as hereinafter provided or
extended by mutual agreement between the Company and Employee.
2. Duties
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2.1 During the Employment Period, Employee shall serve as
Chief Financial Officer of the Company. The Board of Directors (the "Board") of
the Company recognizes that the Employee's contribution to the growth and
success of the Company has been, and believes will continue to be, substantial,
and desires to assure the Company of the Employee's present and continued
employment in an executive capacity and to compensate her therefor.
2.2 In consideration of the obligations of the Company
hereunder, Employee hereby agrees to devote during the Employment Period
substantially all of her productive time, ability and attention to the
performance of her duties under this Agreement.
2.3 Employee represents and warrants to the Company that there
are no agreements or arrangements, whether written or oral, in effect which
would lawfully prevent Employee from rendering services to the Company during
the Employment Period. Employee
further represents, warrants and agrees with the Company that as of the date
hereof she has not made, and will not make during the Employment Period, any
commitment or do any act in conflict with this Agreement, or take any action
that might divert from the Company any opportunity which would be in the scope
of any present business of the Company.
3. Compensation and Benefits
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3.1 As base compensation for Employee's services hereunder the
Company shall pay to Employee a base salary equal to at least the following:
(i) for the period from October 1, 2001 through September 30,
2002, the amount of one hundred and eighteen thousand
dollars ($118,000) per year;
(ii) for the period from October 1, 2002 through September 30,
2003, the amount of one hundred and twenty nine thousand
eight hundred dollars ($129,800) per year;
(iii) for the period from October 1, 2003 through September 30,
2004, the amount of one hundred and forty two thousand
seven hundred and eighty dollars ($142,780) per year; and
(iv) thereafter for each subsequent calendar year an amount
equal to the previous year's salary plus twenty percent
(20%) of such previous year's salary.
Such compensation shall be payable in accordance with the Company's payroll
policies and procedures.
3.2 (a) As additional incentive compensation for Employee's
services hereunder, the Company shall pay to Employee in respect of each full
fiscal year of the Company which commences within the Employment Period an
amount equal to twenty percent (20%) of a "bonus pool" equal to ten percent
(10%) of "earnings before income taxes depreciation amortization" (EBITDA) (as
hereinafter defined in subsection (b)) of the Company for such fiscal year in
excess of one million four hundred and twenty five thousand dollars
($1,425,000). Such additional compensation shall be paid within thirty (30) days
after the date of receipt by the Company of financial statements, certified by
the independent public accountants at the time engaged by the Company. The
amount of additional compensation payable in respect of any such fiscal year
shall not be prorated if the Employment Period terminates during such fiscal
year.
(b) At the end of each fiscal year of the Company covered by
Section 3.2(a), the Company's independent public accountants shall prepare and
submit to the Company and Employee an audited financial statement covering the
operations of the Company for such year and setting forth, among other things,
the "earnings before income taxes depreciation amortization" (EBITDA) of the
Company for that year as hereinafter defined. Each such financial statement
shall be prepared in accordance with generally accepted accounting principles
and generally accepted auditing standards consistently applied and shall be
accompanied by a Report of the Company's independent public accountants auditing
such financial statement to the effect that such financial statement was
prepared in accordance with
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generally accepted accounting principles and generally accepted auditing
standards. For the purposes of Section 3.2(a), the "earnings before income taxes
depreciation and amortization" of the Company for any fiscal year of the Company
shall mean the consolidated gross revenues and income of the Company and its
consolidated subsidiaries for such fiscal year remaining after deduction
therefrom of (i) all normal cost and expense deductions determined in accordance
with generally accepted accounting principles and generally accepted auditing
standards consistently applied and appropriately deductible from gross revenues
under such principles and standards and (ii) an amount equal to the amount of
base compensation paid to Employee by the Company during such fiscal year under
Section 3.1 (but no deduction for any additional compensation paid or payable to
Employee at any time under this Agreement), but excluding (A) any provision for
any United States Federal, state or local income taxes or for any foreign income
taxes in respect of such fiscal year, (B) any depreciation and/or amortization
and (C) any profit or loss, as the case may be, resulting from unusual and
nonrecurring items which are not identifiable with, or do not result from, the
business operations of the Company and its subsidiaries. For purposes of this
Section 3.2, the "fiscal year" of the Company means the annual period for which
the Company files its Federal income tax returns.
3.3 Nothing herein shall prevent the compensation provided for
in Section 3.1 and/or Section 3.2 from being increased at any time by the
consent and agreement of the Company and Employee, as approved by the Board of
Directors of the Company; and nothing herein shall prevent Employee from being
entitled to receive any bonus or additional compensation which may be voted or
approved by the Board of Directors of the Company. If any substantial entity
shall be added to the Company during the Employment Period, then the parties
hereto agree to negotiate in good faith to determine whether any further
compensation to Employee is appropriate as a result of duties Employee
undertakes on behalf of the Company with respect to such entity.
3.4 It is understood and agreed that all amounts to be paid by
the Company to Employee under this Agreement shall be subject only to deductions
for Federal, State and local payroll and other taxes and charges (including,
without limitation, income taxes, FICA, etc.) and to such other deductions in
respect to Company benefits.
3.5 Any compensation otherwise payable to Employee under this
Agreement in respect of any period during which Employee is receiving amounts
for loss of earnings or the like under any Company insurance plan or policy
and/or under any government program shall be reduced by such amounts.
Article 4. Options
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4.1 On June 29, 2001, the Company granted to Employee a
non-qualified option under the Company's 2001 Stock Option Plan to purchase from
the Company one hundred thousand (100,000) shares of the Company's Common Stock
at the price of $0.50 per share.
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Article 5. Benefits
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5.1 The Company shall obtain and pay for disability insurance
on Employee providing for monthly payments to Employee of at least $5,900 in the
case of Employee becoming permanently disabled as defined in Section 6.3. All
terms and conditions in this paragraph 5.1 are subject to the determination by
the Company's Board of Directors that the payment of such benefit is financial
feasible.
5.2 Except as otherwise expressly provided herein, during the
Employment Period, Employee shall be covered by and participate in the Company's
various benefits as in effect from time to time, including, without limitation,
the Company's medical benefits plan and long term disability plan, as and to the
extent customarily provided by the Company to its other most senior executives
and shall be entitled to paid vacation in accordance with the Company's then
current vacation policy.
Article 6. Death and Disability
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6.1 It is understood and acknowledged that Employee's efforts
expended to date and to be hereafter expended are necessary in order for the
Company to achieve any significant growth and success. Accordingly, if during
the Employment Period Employee should die Employee's beneficiary (determined as
set forth in Section 6.2), shall have the full right to exercise the options set
forth in Article 4; provided, however, that for the purposes of this Section 6.1
only, the Employment Period shall end at the end of the three year period in
which such disability or death occurs and shall not be automatically extended
for any additional period, without any requirement that the Company give written
notice of termination at the end of such three year period in accordance with
Article 1.
6.2 Whenever any of the provisions of this Agreement require
the distribution of any options or stock to Employee's beneficiary, such
distribution shall be made to such individual or individuals, and in such
shares, as Employee shall last have designated by written notice to the Company
or, in the absence of an effective designation, to her widow or, if he shall not
then be living, to her children in equal shares or, if no such child shall then
be living, to her descendants in equal shares per stirpes. If no such
beneficiary shall be living when any such payment and/or distribution is
required to be made, such payment and/or distribution shall be made to
Employee's estate. Employee may, in the manner provided above, change any such
designation from time to time, may designate successor beneficiaries and may
make separate designations in respect of each provision of this Agreement under
which any such payment may be made.
6.3 For the purposes of this Agreement, Employee shall be
deemed to have become permanently disabled if Employee should be unable, due to
physical or mental incapacity, to substantially perform Employee's duties and
responsibilities under this Agreement for a period of one hundred eighty (180)
consecutive days.
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7. Termination
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7.1 Subject to the provisions of this Article 7, Employee's
employment with the Company may be terminated at any time (i) by the Company,
"For Cause" or "Without Cause", by giving written notice of termination to
Employee, in the manner provided in Article 10, no later than sixty (60)
calendar days prior to the date elected by the Company as the termination date,
or (ii) (i) by Employee, by written resignation, in the manner provided in
Article 10, no later than sixty (60) calendar days prior to the date elected by
Employee as the resignation date; the Employment Period shall end and terminate
on the aforesaid termination date or resignation date, as the case may be.
7.2 Termination "For Cause".
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(a) For the purposes of this Agreement, "For Cause" is defined
as a termination for: (i) willful breach of confidentiality, non-disclosure or
non-compete obligations to the Company; (ii) conviction of, or plea of nolo
contendere to, any felony involving dishonesty or moral turpitude; or (iii)
conviction for fraud, embezzlement or other act of dishonesty that causes
material injury to the Company or any of its affiliates.
(b) If Employee's employment with the Company should be
terminated by the Company "For Cause", Employee shall not be entitled to receive
any base compensation under Section 3.1 after the date of such termination;
however, Employee's rights and benefits under all other Articles and Sections of
this Agreement shall continue for a period of no longer than three (3) months.
Employee's right to purchase shares of the Company's stock under Article 4 shall
continue to be governed by the Employee's stock option agreement.
7.3 Termination "Without Cause" or Certain Resignation.
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(a) For the purposes of this Agreement, "Without Cause" is
defined as a termination for any reason other than "For Cause".
(b) If Employee's employment with the Company should be
terminated by the Company "Without Cause", or if Employee should resign his
employment with the Company because of demotion from Chief Financial Officer of
the Company then in such case:
(i) Employee shall be entitled to receive any and all amounts
which would have been paid to Employee (i.e., base
compensation and additional incentive compensation) under
Article 3, as in effect on the date immediately prior to
Employee's termination hereunder, had his employment had not
been so terminated shall be paid in full to Employee until the
end of the three year period under Article 3 in which such
termination occurred (with regard to the additional incentive
compensation, such compensation shall be determined based upon
the fiscal year in which such termination date occurs and the
amount of such additional compensation as so determined shall
be payable for each fiscal year which commences within such
three year period);
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(ii) Employee shall have the full right to exercise the
options and purchase shares set forth in Article 4 in
accordance with terms of the applicable stock option
agreement;
(iii) In lieu of the payments provided in (i) of this Section
7.3, Employee may elect in writing the payment to Employee by
the Company of a lump sum settlement in an amount equal to
eighty percent (80%) of the total aggregate payments that
would have been payable under such (i) of this Section 7.3;
and
(iv) Employee's rights and benefits under all other Articles
and Sections of this Agreement shall continue in accordance
with the terms and provisions thereof, including, without
limitation, Employee's rights and benefits under Article 5.
7.4 Resignation by Employee
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If Employee should resign his employment with the Company for
any reason other than demotion from Chief Financial Officer of the Company or a
Business Combination, then in such case, the Company shall have no liability or
obligation to Employee hereunder or otherwise in respect of his employment other
than the obligation to pay to Employee any accrued and unpaid base compensation
under Section 3.1 as of the date of termination plus such additional
compensation as shall be due to Employee under Section 3.2 in respect of any
fiscal year in which such resignation occurs and the amount of such additional
compensation in respect of such fiscal year shall not be prorated even though
such resignation occurs within such fiscal year.
Article 8. Business Combination
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8.1 For purposes of this Article 8, a "Business Combination"
shall mean the merger or consolidation of the Company with or into, the sale or
other transfer of all or substantially all of the assets and/or business of the
Company to, or the ownership of ten percent (10%) or more of the total voting
capital stock of the Company then issued and outstanding by, any person or
entity not affiliated with the Company as of October 1, 2001.
8.2 It is expressly recognized by the parties that a Business
Combination would necessarily result in the material alteration or diminishment
of Employee's position and responsibilities. Therefore, if, during the
Employment Period, there shall occur, with or without the consent of the
Company, a Business Combination, and if the Employment Period should be
terminated by the Company during the last year of the Employment Period, or if
during such last year Employee should resign her employment with the Company
because of demotion from Chief Financial Officer of the Company then in such
case, and only in such case, and notwithstanding anything in this Agreement to
the contrary, the following provisions shall apply:
(a) Employee shall be under no obligation whatever to seek other
employment opportunities during the aforesaid one (1) year
period, and Employee shall not be obligated to accept any
other employment opportunity, which may be offered to Employee
during such period.
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(b) Employee shall be entitled to receive any and all amounts
(i.e., base compensation and additional incentive
compensation) under Article 3, as in effect on the date
immediately prior to Employee's termination or resignation, as
the case may be, hereunder, for the period of one (1) year
commencing from the date of termination or resignation
hereunder (with regard to the additional incentive
compensation, such compensation shall be determined based upon
the fiscal year in which such termination or resignation date
occurs and the amount of such additional compensation as so
determined shall be payable for each fiscal year which
commences within such one year period);
(c) In lieu of the semi-monthly payments provided in (b) of this
Section 8.2, Employee may elect in writing the payment to
Employee by the Company of a lump sum settlement in an amount
equal to eighty percent (80%) of the total aggregate payments
that would have been payable under such (b) of this Section
8.2.
(d) All of Employee's rights under this Agreement, including,
without limitation, the right to exercise the options and
purchase shares set forth in Article 4 in accordance with
terms of the applicable stock option agreement, shall continue
in full force and effect in accordance with their terms during
such one (1) year period.
The payments to be made to Employee under (b) or (c) above of this Section 8.2
shall be in lieu of Employee's rights to receive payments under Article 3;
however, notwithstanding any termination or resignation under this Article 8,
Employee's rights and benefits under all other Articles and Sections of this
Agreement shall continue in accordance with the terms and provisions thereof,
including, Employee's rights and benefits under Article 5.
8.3 Any termination or resignation under this Article 8 and
the receipt by Employee of any amounts pursuant to Section 8.2 shall not
preclude Employee's employment by any other party after the date of such
termination.
Article 9. No Adequate Remedy
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The parties declare that it is impossible to measure in money
the damages which will accrue to either party by reason of a failure to perform
any of the obligations under this Agreement. Therefore, if either party shall
institute any action or proceeding to enforce the provisions hereof, such person
against whom such action or proceeding is brought hereby waives the claim or
defense that such party has an adequate remedy at law, and such person shall not
urge in any such action or proceeding the claim or defense that such party has
an adequate remedy at law.
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Article 10. Notices
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Any notice, request, consent, waiver or other communication
given, made or withdrawn pursuant to this Agreement to be effective shall be in
writing or by telegram, telex or other electronic written communication and
shall be effective (a) same day when delivered personally to Employee or to the
Company, as the case may be, by hand or courier service or (b) three (3)
business days after deposit in the mail, sent certified, postage prepaid, or (c)
same day when sent by telex or other electronic written communication,
answerback or other acknowledgement of receipt received, addressed as provided
below, or to such other address as may be designated by any party hereto giving
or changing its address:
If to Employee, to:
Xxxxxxxxx X. Xxxxx
0000 XX 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
If to the Company, to:
Intercallnet, Inc.
0000 XX 0xx Xxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Article 11. Personal Agreement
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This Agreement is personal. Employee shall not have the right
to assign, sell, pledge or otherwise dispose of his rights and obligations under
this Agreement without the Company's prior written consent and then only in
accordance with such consent.
Article 12. Confidential
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It is understood and agreed by the parties hereto that the
matters described in this Agreement and the terms and conditions of this
Agreement shall be treated as confidential by Employee and the Company and shall
not be disclosed or made available by Employee or the Company to any third party
without the prior written consent of the other party hereto and then only to the
extent and only in accordance with the conditions set forth in any such consent.
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Article 13. Miscellaneous Provisions
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13.1 This Agreement contains the sole and complete agreement
concerning the arrangements between the parties and supersedes and replaces any
and all prior agreements, written and/or oral, between the parties; accordingly,
all of such prior agreements between the parties are null and void and without
any force or effect. Neither party has made any representation with respect to
the subject matter of this Agreement or any representations inducing the
execution and delivery hereof except such representations as are specifically
set forth herein and each of the parties hereto acknowledges that he or it has
relied on his or its own judgment in entering into this Agreement.
13.2 No waiver, amendment or modification of this Agreement or
of any covenant, condition or limitation herein contained shall be valid unless
in writing and duly executed by the party to be charged therewith and no
evidence of any waiver, amendment or modification shall be offered or received
in evidence in any proceeding, arbitration or litigation between the parties
hereto arising out of or affecting the Agreement, or the rights or obligations
of the parties hereunder, unless such waiver, amendment or modification is in
writing, duly executed as aforesaid. The parties further agree that the
provisions of this Section 13.2 may not be waived except as herein set forth.
13.3 The Article captions are inserted only as a matter of
convenience, and shall not be used in any manner to interpret the provisions
thereof.
13.4 This Agreement is executed and delivered in the State of
Florida and shall be construed and enforced in accordance with the laws and
decisions of that State, without reference to its choice of laws rules.
13.5 The effective date of this Agreement for all purposes
shall be the date first above written.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement or caused it to be executed in their name and on their behalf by their
respective representatives thereunto duly authorized as of the date first above
written.
Employer:
Intercallnet, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
President
Employee:
By: /s/ Xxxxxxxxx X. Xxxxx
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Xxxxxxxxx X. Xxxxx
Chief Financial Officer
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